Capstone Turbine Results A Coin Toss On The Surface (CPST)

Capstone Turbine Corporation (NASDAQ:CPST) has posted its quarterly results, and traders on Wall Street are somehwat mixed on the data.  If traders focus merely on the results in the quarter that went to the top-line and bottom line, then they can take it cautiously or negative.  If traders are using the metric of backlog to judge future revenues, then they have reason to cheer. 

The reported gross loss for the first quarter was $1.1 million, or 15%of revenue, less than the $2.5 million (44% of revenue) from the samequarter last year.  The company generated $20 million in new productorders received in the quarter, but the company posted revenues of $7.5million.  This is an increase from last year but under last quarter’snumbers of $9.3 million and under estimates.  We would still cautionthat revenues in a company of this size are very lumpy and literally asingle sub-component of one contract can make or break results as aresult.  It showed a net loss at -$0.07 non-GAAP EPS, compared toestimates of -$0.05.

We saw a huge increase again in the backlog, which stood at the end ofthe quarter at $42.7 million.  This metric used to determine futureorders is up over 50% from the $27.9 million reported at the end oflast quarter and up roughly seven-fold year over year. Capstone shipped89 units in the first quarter of Fiscal 2009, compared to 77 units inthe same period last year.  If we go back to the prior earnings pressrelease, you will see that the company shipped 140 units in the priorquarter.

Cash balances decreased by $9.9 million during the first quarter andthe total cash and cash equivalents were $32.7 million as of June 30,2008.  As far as the rest of the reaction, that will depend upon conferencecall comments here any minute and analyst reaction in early hours onTuesday morning. The initial reaction has the stock down almost 3% at $2.35 in after-hours trading.

Jon C. Ogg
August 11, 2008